Southwest’s Uniquely Customer-Friendly AirTran Merger Plan

Today is Valentine’s Day, so how about a little LUV story? One of the things about Southwest’s takeover of AirTran that I like the most is the transition plan. The way it’s being done is incredibly customer-friendly, and it’s likely to have a very minor impact on travelers, unlike what happens in most mergers. That is probably because the Southwest/AirTran merger is completely unique in how it’s proceeding. In other words, no other mergers could use this plan.

What’s so unique about this merger is that AirTran truly is disappearing. This isn’t a “merger of equals” or anything else like we’ve seen in other big mergers. This is Southwest taking AirTran and turning its assets into Southwest. Because of that, the transition can occur much more easily. Effectively, this is how it will work.

Southwest has already started slowly canceling AirTran flights and re-creating them as Southwest flights. For example, today, AirTran operates three flights between LA and Atlanta while Southwest has none. Flash forward to a Tuesday in September and there are now three daily flights on Southwest as well as one single redeye on AirTran. So Southwest replaces the AirTran flights and has the ability to grow a little as well.

If you fly on an AirTran flight, you’ll get the AirTran onboard product. There will be business class, assigned seats, bag fees, etc. If you fly on a Southwest flight, you get the Southwest product with open seating, all coach, and no bag fees. Over time, all the AirTran flights will disappear and the Southwest flights will be the only ones to remain.

It seems so simple, and really, it is. Southwest has dramatically reduced the number of AirTran flights starting this summer (from 680 daily departures on a Friday all the way down to 568). This will allow the airline to start pulling out airplanes from the AirTran fleet to send them through the car wash where they’ll come out looking exactly like Southwest airplanes inside and out. At the same time, crews will begin coming over from AirTran to Southwest. They’ll get training and will be assimilated into the Southwest operation.

If you’re a cook, it’s like slowly adding an ingredient and mixing as you go instead of just dumping everything in at once. It just makes a lot of sense to do it that.

So why can Southwest do this so effortlessly and the others can’t? Because the other mergers are completely different animals. Whether it was America West/US Airways, Delta/Northwest, or Continental/United, these were all true mergers in the sense that they took bits and pieces from each other to create the new combined airline. Think about the harmonization of the frequent flier program as just one piece of the pie. There isn’t one airline that stays the same in these mergers, but there is in the Southwest/AirTran merger. AirTran is effectively disappearing and will leave barely a trace, and that allows Southwest to gradually phase it out without making any big changes to the surviving operation along the way.

I’m not exaggerating when I say tat AirTran is disappearing. According to Southwest spokesperson Chris Mainz, “we haven’t announced or decided on anything concrete that we plan to pull over from AirTran and incorporate into Southwest.” There will be some things behind the scenes that need to come over. For example, Southwest isn’t capable of flying internationally but AirTran can. That not a customer-facing issue, but it is something Southwest will need to incorporate behind the scenes to allow it to fly internationally. That’s why I imagine that toward the very the end, AirTran will just be a collection of international flights and redeyes, the two things that Southwest doesn’t do today. (Southwest has said that some limited redeyes are likely to come over.)

In the meantime, Southwest and AirTran continue to operate separately with Southwest getting bigger and AirTran getting smaller. There are efforts to connect the two systems with codesharing, but Southwest’s technology team is the hold-up. It can’t codeshare yet, despite years of trying. The plan is to have that up and running sometime in the near future, and that will make it easier to transition AirTran out slowly without completely killing the feed in the Atlanta hub.

Meanwhile, Southwest is doing what it can to relocate AirTran flights to be near Southwest in airports around the US so they can operate together, even as they continue to operate as two separate airlines.

I think WN also realizes its costs are high, and so it will wring as much of the bag fees from AirTran customers as it can, and claim they’re still “AirTran flights”. Not nice for the people in ATL. (Although I honestly think every other person in ATL has a Delta Skymiles Amex Card with first bag free and etc…)

I feel bad for AirTran loyalists. They lose what they have come to value and WN goes on believing they are the chosen carrier that does it all right. The arrogance of it drives me nuts. I have finally flown on WN this year and can categorically say I will not fly them again unless there is no other choice. I didn’t like AirTran, but they were palatable compared to my experience on WN.

On the other hand, for the WN loyalists this is good news. They get red-eyes, international flights, and the like. So good for them, and likely good for the rest of us as WN puts slight downward pressure on fares… or not, as they have rarely been the cheapest on routes out of DEN where they go up against F9.

WN should have been ramping up their computer system years ago to be in the 21st century. Plan ahead for the day you might need something. Did they think they could do with AirTran what they did with Morris Air?

It really is a unique merger. Is there precedent for anything like this?

The problem I foresee with this approach is it creates confusion over brand/schedule for passengers. If you want to fly ATL-LAX in September you might go to airtran.com and think you only have an option of one flight. If that flight doesn’t work with your schedule you’ll keep moving. What if you want to combine an AirTran flight outbound with Southwest returning? What if the AirTran flight cancels and you want to be protected on the Southwest flight leaving 2 hours later?

AirTran has added one daily flight between Austin and Houston starting this summer. Southwest is well known here but are people going to know to check airtran.com as well as southwest.com for their flights?

I don’t think there is precedent on such a large scale, but on a smaller scale, sure. I don’t recall details but Morris Air into Southwest was probably quite similar. It’s just a lot different when you do something with such large scale.

Very true on the issues across brands, and that’s why they need to get that codesharing in place ASAP. Once again, it’s a tech issue that needs to be resolved. But that is a missing piece that will really impact split markets.

Well nobody said it was going to be perfect. But remember splitting the brands is not a long term solution – it’s a band-aid while the two products are being combined. The Austin-Houston route is in support of new Air Tran international service to Mexico. That single route is designed to keep the system congruous, not necessarily to pack the flight with Air Tran brand devotees. People booking on southwest.com may not know to check Air Tran for that single flight, but people booking through their GDS or on Orbitz or Travelocity will see an Air Tran flight where they didn’t previously.

CF, I get that you are applauding the transition plan per se, but there are plenty of gambles for Southwest in the merger strategy.

Southwest will no doubt do a good job of selling its very competent economy class product here in Atlanta, but the decision to ditch AirTran’s business class is causing a lot of grumbling here among loyal AirTran business travelers.

Apparently, Southwest is banking on the belief that AirTran customers will fall in love with Southwest’s product over the one which AirTran is offering today. I think that’s risky and a that good many higher-fare, loyal AirTran business travelers will leave.

Where will those business flyers go? I will bet that they will head over to Delta for the opportunity to ride up front and a better frequent flier program that the one Southwest offers. DL will also look appealing to them because Southwest is cutting the number of flights to/from Atlanta from the number that AirTran currently operates.

To make matters worse, Southwest’s explanations in the local press regarding the elimination of AirTran’s business class have been condescending. They’ve been along the lines of, “Southwest will stick to its core competencies and product.” So there.

I get the concept of product commonality across the airline. I also understand that operating AirTran as a subsidiary company forever would defeat the purpose of a merger. But still.

In the end, it seems like Southwest will be driving some very loyal customers away because of some of the decisions made about integrating (read: “downgrading”) the product.

I’m saying absolutely nothing about the overall strategy decisions in this post. I’ve written about that many times before. My point here is simply to talk about the transition plan and how it’s customer friendly. Whether it’s the right decision or not is a different story, and I agree that it’s not necessarily the right way to go.

I would like to be the first to nominate PEOPLExpress for the Worst Airline Ever award. Nothing says that you don’t really know that the industry has changed in the last 20 years like branding your airline after one that no one in the general public remembers, and if they do it is for bad reasons.

Does anybody know why southwest doesn’t offer red eye flights? I’ve often wondered this myself. Is it something with the unions? I know the reason for no international flights is becuase they’re technology can’t handle it.

I think it’s just the way they’re built operationally. It could be crew contract-related, but my guess is that it’s more just about how they build their lines and schedule their fleet. It’s very strange that they haven’t started redeyes yet, but it could very well be a tech issue in that their systems (electronic and otherwise) aren’t programmed to work that way. Not sure.

Southwest has a shorter flying day (3 lines of flying?) then the majors (10 vs 12 hours), so the aircraft are back at their base for maintenance or whatever. In general they don’t like to do stuff late at night.

For redeyes, they felt before that they didn’t need them to make money. Now its a product that they see people want (probably helps to have AirTran financials for them too). I expect about 25 redeyes, including several into ATL and BWI.

The question I have is if they’ll do mid-con redeyes to MDW and HOU (a la CO/IAH and AA/DFW).

Interesting, I prefer my redeyes to be as long as possible, thus the SEA-BOS or SEA-JFK on JetBlue is perfect. I want to sleep, not deal with the lights at the airport while I’m wanting to sleep, but not wanting to miss my connection.

3 lines of flying? Most SW planes operate 10 or more flights each day(I’ve personally seen routines with about 15) for 16+ hours and they don’t return to any particular base at night as they aren’t based out of certain domiciles.

Traditionally, SW hasn’t flown red-eyes as they do MX at night as well as the a/c cleaning. Once HI comes online, you’ll certainly see red-eyes. Red-eyes have been in the crew contracts for quite a while.

This merger has been anything but “customer friendly” – just like pretty much every other recent merger that has occurred. The merger has meant higher fares, product devaluation, etc. Nothing unique, but to call a merger “customer-friendly” seems rather oxymoronic.

They’ll go through the plane wash as well – going to be reconfigured as part of the process, but I don’t know when the first one comes out.

Here’s a funny ValuJet story. Back in early 2007, I referred to AirTran as TAFKAV (The Airline Formerly Known as ValuJet) in a blog post. I was still running PriceGrabber’s metasearch site at the time when an AirTran rep called me up and said that the airline refused to pay us unless I pulled the post down. How very touchy.

Yep, I didn’t always do images on the early posts and that was only about 6 months after I started so there weren’t a lot of comments back then.

I never flew the old AirTran, but I did see their 737s at Dulles a lot when I was interning at United back in college. I did fly ValuJet, however. Did an Atlanta – New Orleans roundtrip when I was looking at colleges.

Word I heard was that the 717 are going to leased to another “MAJOR AIRLINE” starting in July…..so many planes that month and then monthly till all are gone. So I guess it is feesible that some of them will be “re-done” but probably not awhole lot!! I have heard this while at work…I fly for AirTran Airways……..

Vickey – You are correct. Southwest is converting them to Delta standards and then delivering them over a couple year period. None of them will be converted to Southwest standards, so they’ll just stick with AirTran until they’re gone.

So just wondering, if they are slowly making AirTran disappear and absorbing the planes into Southwest, why do they need to get a single operating certificate from the FAA? Why can’t they just transfer everything over to Southwest and then abandon the AirTran certificate and be done with it?

I’m a layman who doesn’t know a huge amount of this, but I’m guessing that they’re going to go for a single operating certificate because of the 717. I’m guessing its easier to take the documentation and operating regulations that AirTran has for the 717s on their certificate and merge them onto a single operating certificate, than it is for Southwest to build and develop their documentation and operating regulations on the 717.

Although, this does bring up the interesting question on the ex-AirTran 737s getting the Southwest software for the instrument console. Welcome back to the steam gauge age..

Perhaps Airtran should disappear. Here’s why:
AirTran airlines has a a really obnoxious policy that if you are flying business class on the first leg of a flight, your bag is checked free. But if you are flying business class on only the second leg of the flight, you must pay $20 like everyone else. So many times the first leg has no upgrade availability because most people that fly the two leg flights understand the system. But the upgrade is usually available on the second leg out of Atlanta.
So, if you have a voucher for a business class upgrade on BOTH legs, you are usually SOL on the first leg of the flight and on the baggage fee. If you want to use an upgrade voucher you’re are screwed out of 2 out of 3 of the benefits unless you can beat the “first leg only” upgraders to the punch. The manager I spoke to (Ashley #212) seems to think this is fair. I think I will take my business to United in the future.

Tell me….what happens to the vouchers issued after our nightmare flight on Air Tran? We received one round-trip to us within a year. Should they merge completely during that time and the name changes to Southwest, will they still honor our tickets?